Bluegrass mental health board tells employees they might get raises

Bluegrass Regional Mental Health-Mental Retardation Board sent letters to its 2,300 employees saying they could get raises or bonuses.

The Joseph A. Toy Center at the Bluegrass Regional Mental Health-Mental Retardation Board, 1351 Newtown Pike, is named for the agency's former director, who worked as a consultant and ran Bluegrass's for-profit subsidiary.
Lexington Herald-Leader

Adam Edelen, the state auditor, said his office's special examination of Somerset isn't about the city's sale of gasoline to the public.
HERALD-LEADER

The new Eastern State Hospital in Lexington, shown in June, is in the finishing stages of construction and is scheduled to open in summer 2013. Gov. Steve Beshear announced Friday that K Healthcare is expected to operate and manage the hospital under a proposed $43 million contract with the Kentucky Cabinet for Health and Family Services. Photo by Pablo Alcala | Staff
Lexington Herald-Leader

Bluegrass purchased this 2,508-square-foot home at 91 Whitetail Run Drive in Somerset, less than half a mile from Lake Cumberland, for $295,000 after being awarded the contract on Oakwood.

Joseph Toy, president of Bluegrass MHMR at Eastern State Hospital, in 2007

Construction of the new Eastern State Hospital in Lexington is nearing completion, and the hospital is expected to open in summer 2013. Gov. Steve Beshear announced Friday that K Healthcare is expected to operate and manage the hospital under a proposed $43 million contract with the Kentucky Cabinet for Health and Family Services. Photo by Pablo Alcala | Staff
Lexington Herald-Leader

Bluegrass has sent letters to its 2,300 employees suggesting that raises or one-time bonuses could be approved by the non-profit's board of directors at a special meeting Thursday. The announcement follows Lexington Herald-Leader stories about Bluegrass's spending — including executive pay — and an impending financial examination by state Auditor Adam Edelen.

Money for raises for most Bluegrass employees could come from $31 million in cash reserves and similar assets, board chairman Scott Gould and chief executive officer Shannon Ware wrote in one of the letters, sent Friday in response to the newspaper stories. For Bluegrass workers at facilities in Somerset, a bonus to be paid by June 30 could come from the non-profit's current management fee, Ware wrote in a separate letter sent Monday.

Bluegrass would prefer not to dip into its cash reserves, but "we are committed to an unprecedented move in our history," Gould and Ware wrote. Rank-and-file workers at the non-profit have not gotten raises in several years, which "weighs heavily on the board and leadership," they wrote.

"We have always believed it is important to respond to the very legitimate, important and worthwhile concerns of our staff — including the need to reward and invest in our employees," they wrote.

"Our success is a direct result of the hard work you do every day to better the lives of those who seek our help," they wrote. "We have not lost sight of that important fact. We know that our programs are only as good as our staff."

On June 3, the Herald-Leader reported that Bluegrass spends plentifully on executive compensation, political lobbying and real estate while citing tight budgets to its front-line employees, many of whom complain about low pay, no raises and austere working conditions. Bluegrass's annual revenue more than doubled during the past six years to $176 million as it expanded and won more state contracts.

The Herald-Leader also reported that Bluegrass's executive payroll includes Ware; her husband, Joseph Toy, who is her predecessor and remains as a paid consultant; and their son-in-law, Eric Crabtree, the director of information technology. In 2010, Ware and Toy together took home more than $1 million in total compensation.

On Thursday, in response to the stories, Edelen told Bluegrass to expect the arrival of his auditors.

Bluegrass is funded chiefly by the state Cabinet for Health and Family Services, which last year paid it $126.2 million, plus $32.5 million in Medicaid. Aside from providing psychiatric care, counseling and addiction treatment, Bluegrass manages two state mental health centers, Eastern State Hospital in Lexington and Bluegrass Oakwood in Somerset.

Ware did not return a call Monday seeking comment. Gould, in an interview, said there has been no discussion of changes in Bluegrass' senior management.

"I feel like we're just trying to conduct business," he said. "Obviously, people are always happy to get a raise. So I'm sure they're happy for whatever we can do for them."

In their letter to Bluegrass employees, Gould and Ware said that, two weeks earlier, they had "alerted everyone that a focused media review was under way from the Herald-Leader."

"Now, several days post-coverage, we remain concerned about the purpose of the coverage," Gould and Ware wrote. "We are very concerned that several outside interests may be seeking to create a great deal of confusion and doubt that could ultimately compromise the important work that we do."

In an attachment to their letter, Gould and Ware defended the compensation paid to Ware and Toy, including base salaries, bonuses and deferred compensation plan payouts. Senior management deserves that money, they wrote.

"Unlike all other employees of the board, the CEO has comprehensive day-to-day responsibility and authority for all combined corporations, all staff, all client services and a budget of $171 million. The scope of her responsibilities is great and so is her accountability to the board of directors and all of our publics," they wrote. "The current CEO is paid reasonably for her responsibilities and comparably to her peers."